PSC Report asked Dr Jakkie Cilliers for his views on recent developments. Jakkie is African Futures and Innovation Programme Head and Chair of the Institute of Security Studies Board of Trustees.
The African Union (AU) 2023 theme is ‘Accelerating the implementation of the African Continental Free Trade Area (AfCFTA). How do you assess the AU’s promotion and implementation of AfCFTA to achieve a common AU approach towards economic integration?
AfCFTA has generated significant excitement in Africa, and there has been solid progress. Our forecast, which compares the impact of eight sectoral scenarios for each African country, indicates that the agreement's full implementation will contribute more than other sectors to poverty reduction and average incomes. In the long term, it will do better than an agricultural revolution or a manufacturing transition, facilitating both.
Africa will not develop without regional trade integration since its individual markets are too small. Nor will we ascend the export value chain, attract foreign investment or become part of global value chains. The need and motivation for AfCFTA are, therefore, clear, but implementation is now imperative.
Many questions remain, however. Given the impasse in the region over the western Sahara, how will North African countries participate? What do we do about coups and unconstitutional changes of government or with countries torn by conflict, such as Libya, Sudan, South Sudan, Somalia, and the Democratic Republic of Congo? And what about our porous borders?
A primary objective of this year’s theme is to domesticate AfCFTA and capacitate member states to develop strategic action plans to hasten implementation. In your view, was this objective achieved?
AfCFTA implementation is a process, not an event, but as of 2022, 44 of 55 AU member states had domesticated it into their laws and developed and adopted national implementation strategies. AfCFTA committees have been established in many countries to oversee implementation. Typically, the head of state or government chairs these committees, including representatives from ministries, businesses and civil society.
The strategies outline the steps countries will take, including addressing non-tariff barriers, promoting trade and investment and building capacity. The AU has also provided technical assistance to member states to develop their strategies, including training, legal advice and development of implementation tools and resources. So progress has been substantial.
Eight countries have participated in the AfCFTA Guided Trade Initiative (GTI), which seeks to facilitate trade among member states that meet minimum requirements. Has this initiative successfully enhanced trade among the piloted countries and improved supply chains?
The AU Commission found that the value of trade among the countries increased by 20% in 2022 compared to 2021, and the average customs-clearance time is 30% shorter. But since trade among African countries has generally increased over this period, it's difficult to pinpoint the exact contribution of the GTI.
Another indicator of progress is the establishment of the Pan-African Payment and Settlement System, which allows African businesses to settle transactions in African currencies. This reduces transaction costs and promotes trade among African countries. AfCFTA has also adopted rules of origin for over 87% of tariff lines. African governments are harmonising regulations in competition policy, intellectual property rights and investment to create a more predictable and business-friendly environment. Early indications of progress are, therefore, promising.
The AU’s Development Agency-New Partnership for Africa’s Development has produced a progress report of the first Ten-Year Implementation Plan of Agenda 2063, which expired in December 2023. What successes were reported?
The document consolidated progress reports from 38 of 55 AU member states, but we don’t know about the other 17. And data in Africa are often problematic. The report finds a positive upward trend in all seven aspirations against 2021 targets. Most promising were advances in the attainment of aspiration 2 ‘An integrated continent politically united and based on the ideal of Pan-Africanism and the Vision for Africa’s Renaissance”.
The strong 84% performance was due mainly to the signing and ratification of AfCFTA, effective 01 January 2021, and to the establishment and operationalisation of the AfCFTA secretariat in Accra, Ghana. However, there must be concern about progress towards a peaceful and secure Africa, aspiration 4. The litany of coups and levels of violence would appear to indicate the reverse.
What key lessons and best practices should member states and the AU Commission adopt during the second 10-year plan (2024 to 2033)?
The progress report for the first ten years is candid in the limited progress in aspiration 1, ‘A prosperous Africa based on inclusive growth and sustainable development’, and aspiration 3, ‘An Africa of good governance, democracy, respect for human rights, justice and the rule of law’.
The cumulative impact of the 2007/08 financial crisis, COVID-19, Russia’s invasion of Ukraine and United States/China tensions on top of increased climate change has translated into a slow-growth world. Among many implications, such a world needs fewer commodities and we are still heavily commodity export dependent.
Africa needs to grow much more rapidly. AfCFTA progress is key, although insufficient. To boost regional trade we need connecting infrastructure, a better-educated and healthier workforce and facilitating policies, among others. That requires substantially more funding at much lower interest rates than currently available.
Instead of growth through foreign direct investment, I sense that Africa is heading for serious debt challenges. This is likely to culminate in some type of debt standstill and debt forgiveness if one looks at the trouble that Zambia has encountered in debt discussions. Then there is the democratic regression, long evident in the developed world, that has also come to Africa.
These two outcomes, slow growth and democratic regression, are, of course, closely linked. In our analysis, the latter is largely a result of the former. Outcomes include a rash of coups in Francophone Africa. In 2020, we did a detailed study on the impact of COVID-19 on Africa’s development prospects and the results have stood the test of time. Government revenues collapsed with COVID-19, poverty increased, and incomes declined.
On average, Africa lost three to four years of development through COVID. Average incomes returned to their 2019 levels only four years later. On the current development trajectory, Africa will return to its 2019 pre-COVID level of extremely poor people (roughly 21.4% of Africa’s population using US$2.15) in 2034! We are making progress, but more needs to be done.
Two unconstitutional changes of government occurred in 2023, with a lack of development, poor investments in infrastructure, and external economic shocks as contributing factors. What do you project for governance on the continent in 2024, and how can the AU better address deficits to achieve Agenda 2063?
The organisation should be doing more. In my view, it has gone backwards by merging the departments of peace and security and governance. The African Peace and Security Architecture is neither operational nor fit for purpose. Instead of rigorous election monitoring, it seems to stand by when leaders manipulate constitutions to extend their stays in power. The importance of democracy is, of course, being challenged globally, which is evident in the development successes of the Asian Tigers and, more recently, China.
Consensus on the importance of democracy for development is much weaker today. The AU should reinvigorate its efforts to ensure that elections are truly free and fair and report on that without fear or favour. The AU Commission should re-establish its early warning unit and insulate it from interference by member states through, for example, the Peace and Security Council.
Perhaps even more importantly, it should develop and rigorously implement a protocol on good governance that commits all governments to full transparency on, for example, all sovereign loan agreements. There is no reason why loan and public-private partnership agreements are not in the public domain.
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